Prepaid Insurance to Increase By 50% In 2013

by admin on September 17, 2012 inUncategorizedwithComments Off on Prepaid Insurance to Increase By 50% In 2013Tweet

For the many Australians who decided to prepay their health insurance, next year could come as a big shock with experts projecting a 50% increase is on the cards, if current figures are anything to go by. Hundreds of thousands of people have taken advantage of the prepayment arrangement which entitled them to a 30% government rebate, before the system switched over to a means-tested format and may now find themselves in a difficult situation next year once the price increases come into effect.

The 50% increase is comprised of the government rebate not being available next year, as well as an annual price increase which is due in April 2013. The increase could shock consumers, being the first in a five to six year period which witnessed a reduction in healthcare insurance. For people used to paying cheaper rates the price hikes could enforce even more pressure and, what’s more is there has been no indication of what the increases could amount to.

The means-testing system will take effect for single earners who bring home more than $84,000 and families whose income exceeds $168,000. Single people who are earning in excess of $130,000 and families bringing in more than $260,000 will not qualify for rebates. The policy has been drafted in a bid to save the healthcare system $2.4-billion over the next few years. It has also changed from the traditional model, wherein low and middle income earners were effectively financing the medical costs of those earning higher salaries. For those who are still feeling the financial pinch the changes and reforms could see many people opting to compare health insurance costs from different companies as well as the features being offered in return as they struggle to cope with day to day living expenses and the ever-increasing cost of living. For a sample of how this comparison might work out for you, access HelpMeChoose.com.au and see if you can locate a better deal that what you’re paying for right now.

While there is a lot of speculation about the proposed increases, the amounts by which premiums are set to increase could have a bearing on providers and could force many Australians to compare health insurance and weigh up the cost against the benefits that are being put on the table. And, while not many people are in favour of spending even more on something else it could provide a bit of a shake-up in terms of insurance competition and the deals that companies are willing to package together for consumers.

Even worse is that the insurance companies are earning 50% more for patients’ claims. It has been conceded that running a hospital in South Australia incurs lower overheads and running costs, but that they did not equate with the millions that they were losing out on. The concern that has been raised is that hospitals will either go bankrupt or no longer be able to provide care to the required standards. The news comes in the wake of another announcement that the state government is thinking about cutting 308 jobs and 114 beds from Adelaide’s public hospitals in an endeavour to save the system $83-million a year, a figure close to that being lost through private medical insurance short-changing.

Recent government reforms may just be what the doctor ordered to get consumers to reconsider what they are paying for, to compare health insurance offers and what they stand to gain and how much they are being charged.

Hi my name is Jerry and I am an "insurance expert" living in Aberdeen, welcome to my blog about all things Insurance!

I have been working as a Financial Advisor for 11 years and genuinley love my job. I'd love to help you out in person but please note that nothing on this site is to be taken as financial advice, these are my opinions only!

I try to update the posts regularly with industry information, if you have any comments or queries please get in touch!